Empirical evidence is suggests that upon announcement of the new equity issue, current stocks prices will generally: drop, perhaps because that the new issue is reflects management's view that a common stock is currently about to overvalued.
A seasoned issue that can dilute the holdings of an existing shareholders because it can increases the total amount of the shares on the secondary market, thus diluting or reducing the chance and value of each share.
The seasoned equity is offering a defined as the additional offering of the shares by the business after the bringing in its initial public offering in the stock markets. It can also be referred to as secondary equity offering, the wherein such activity is done by a basically to increase the capital by approaching the financial markets.
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